How should I explain why I am amending a prior year return because orginally did not know all of the deductions I can claim on my Young Living Oil business.

[SweetieJean · Accepted solution]

Make a statement along the lines of the following:

Forgot to claim certain business (self-employment) expenses.

Be sure to have good records in case the IRS asks for proof.

[Hanna]

Thank you. Unfortunately, we do not have good records. How likely are we to have problems the refund will be around 1200.00?

[SweetieJean]

So you are amending based on a guess?  $1,200 is not a small refund. And remember, expenses are deducted from your income, not from the taxes due.

[fanfare]

"$1,200 is not a small refund." Not much point in amending for a small refund.

[SweetieJean]

Actually, I was responding to "How likely are we to have problems"

[fanfare]

Typically, you would explain the deduction you are taking, what form or schedule it appears on ( which you will include as an impacted form). That's all you have to do. The IRS will figure it out.

[SweetieJean]

"Unfortunately, we do not have good records."

[fanfare]

Well, in Part III Explanation, I would leave that out.